May 20, 2023

Impact of Oath In Income Tax Proceedings

The Income-tax Act of 1961 gives several Income-tax Authorities the authority to record statements. The Act does not specify the recording process. While other parts, like 133A, merely refer to statements without using the word "oath," some provisions, like 131, 132(4), etc., specify that the statement recorded must be made under oath. This has undoubtedly resulted in a lot of legal disputes. There are also a number of queries. Is the taking of an oath required each time a statement is recorded? Is a statement valid if it is recorded without being sworn in? What is the value of statements made without taking an oath in terms of evidence? What occurs if an official administers an oath yet the statute only refers to a sworn statement? If the statement was not made under oath, can the taxpayer retract it?

Meaning of Oath: 

According to the dictionary, an oath is a formal, solemn vow that is frequently given in the name of God. In other words, the person making the statement promises to respond honestly to all inquiries. 

Oath type: 

The Income Tax Act does not specify the oath type that must be used. It is a well-known legal concept that the authorities are free to rely on other pertinent statutes if the Income-tax Act is silent on a specific issue. So let's look at the Oaths Act of 1969, which sets down the process for taking an oath.

Authority to Administer: 

According to Section 3 of the Oaths Act, an authority that is authorised to admit evidence may administer an oath. For instance, the Assessing Officer has the authority to gather or admit evidence in assessment procedures. As a result, they can administer oaths. Statements are recorded under a number of sections of the Income Tax Act. Who may record statements is expressly stated in these sections. A statement may be recorded, per Section 132(4), by an Authorised Officer. The authorities authorised to issue summonses and, as a result, record statements are listed in Section 131.  Any income-tax authority, including an inspector, may record statements under section 133A(5). Statements are documented for admission and evidence gathering. The authorities listed in the applicable sections are therefore qualified to administer the oath.

Effect of Oath:

When we discuss the impact of oath, three issues come up: first, the consequences of making false claims while under oath; second, the fallout from failing to administer the oath; and third, the veracity of comments made without the oath. 

Wrong Statement Made Under Oath: 

According to Section 8 of the Oaths Act, anyone providing testimony before a body with the capacity to administer oaths is required to provide the truth about the matter at hand. Deliberately making a false statement may have legal repercussions, including fines and/or prosecution under the Income-tax Act and other statutes like the Indian Penal Code (for the crime of perjury or fabricating evidence). 

Not administering the oath:

According to Section 7 of the Oaths Act, an incomplete or irregular oath will not render proceedings or evidence void. In Chowkchand Balabux vs. Commissioner of Income-tax 41 ITR 465 Gau, the Hon'ble High Court of Gauhati had to address this matter. Naturally, the section in question was Section 37 of the Income Tax Act of 1922, which is comparable to Section 131 of the 1961 Act. It was decided that the income-tax officer is not required to administer the oath required by section 37. The Hon'ble Court determined that the inability to administer the oath does not render the statement illegal by citing provision 13 of the Indian Oaths Act (X of 1873), which is analogous to section 7 of the Oaths Act, 1969. The Hon'ble High Court of Andhra Pradesh declared that if a statement is recorded under section 132(4), it must be done so after administering oath in the matter of ACIT Vs. Yerra Nagabhushanam 226 ITR 843. If you don't do that, the statement has no value as evidence. This indicates that performing an oath examination is required when the Act so specifies.


The next concern in this case is the deponent's ability to take back a statement that was made under oath. In Surjit Singh Chhabra Vs. UOI 1 SCC 508, the Hon. Supreme Court ruled that statements made to Revenue authorities are binding on the deponent, in contrast to statements made to Police authorities. Therefore, if the deponent wants to retract, he may need to provide sufficient justification or supporting proof.

Evidence Value of Oath-Taken Statements: 

An IT authority cannot act solely on the basis of statements, whether they are sworn or not, according to the general agreement among judicial authorities. In ACIT Vs. Sushiladevi Agarwal 50 ITD 524 Ahm, it was decided that an Assessing Officer cannot make a negative conclusion without supporting evidence. In a similar vein, the Hon'ble High Court of Bombay ruled in Deepchand and Co Vs ACIT (1995) 51 TT] 421 that "inculpatory confession should be corroborated by independent evidence". In other words, even if the assertions are delivered under oath, it may not be possible to rely solely on them. Independent proof will need to be provided to back up the claims made. In Pullangode Rubber Produce Co Ltd. vs St of Kerala 91 ITR 18 SC, the Apex Court also stated that although an admission is a significant piece of evidence, it does not prove a case. A recorded statement may address both legal and factual issues. In Banarsi Das vs. Kanshi Ram (AIR 1963 SC 1165), it was decided that an admission of fact would be binding on the maker, but not one of law.


In conclusion, it can be argued that although the law permits the use of a sworn statement as proof and it has evidential value, income-tax authorities would be wise to perform additional research and gather pertinent and corroborating information to ensure that the assessment orders will withstand an appeals process.


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